MP-202(Old)/MP-107
December Examination 2017
Master of Business Administration I Year Examination
Financial Management
Paper MP-202(Old)/MP-107
Time 3 Hours Max. Marks 80
Note: The question paper is divided into three sections B and C. Write answers as per given instructions.
Section A 8 × 2 16
(Very Short Answer Questions)
Note: Answer all questions. As per the nature of the question delimit your answer in one word, one sentence or maximum upto 30 words. Each question carries 2 marks.
Define financial management.
What is time value of money?
What is meant by working capital management?
What do you understand by cash management?
What is Bonus Shares?
Differentiate between Shares and Debentures.
388
MP-202(Old)/MP-107 200 3 (P.T.O.)
MP-202(Old)/MP-107 200 3 (Contd.)
388
If the sales of a company is Rs. 5 lacs variable cost is
70% of sales and fixed cost is Rs. What will be
operating leverage.
(viii) What is pay back period?
Section B 4 × 8 32
(Short Answer Questions)
Note: Answer any four questions. Each answer should not
exceed 200 words. Each question carries 8 marks.
A project of Rs. 20,00,000 yield annually profit of Rs. 3,00,000
after depreciation at 12.5% and is subject to income tax at
50%. Calculate pay back period.
Explain the concept of cost of capital.
Determine the EOQ from the following information:
Annual demand 3200 units
Unit cost Rs. 6
Carrying charger 25% of the value of inventory
Procurement cost Rs. 1.50
Discuss the significance of financial management.
What is the cost of equity capital? Explain.
What is M.M. model? Give its assumptions.
What do you mean by term loans? Discuss.
What is operating financial leverage? Discuss and give
formulas.
388
MP-202(Old)/MP-107 200 3
Section C 2 × 16 32
(Long Answer Questions)
Note: Answer any two questions. You have to delimit your each
answer maximum upto 500 words. Each question carries
16 marks.
10) What are different types of dividend distribution policies?
Explain.
11) "The time value of money is important in financial decision
making". Why?
12) Explain the concept of working capital. What are the constituents
of working capital of a company?
13) ABC company is considering the purchase of a machine.
Two machines are available in the market A and B each costing
Rs. 1,00,000. Earnings after tax but before depreciation are
expected as follows
Year 1 2 3 4 5
Cash flows Rs. Rs. Rs. Rs. Rs.
Machine A 25,000 37,500 50,000 25,000 12,500
Machine B 12,500 37,500 50,000 37,500 25,000
Evaluate the two alternatives according to pay back period
method.